The Decline of Chicago: The City that Doesn't Work

Steve Bartin from this local blog known as Newsalert offers his two cents on the state of the city of Chicago in this online column. Something that's worth a pull from this column among other things I'd like to excerpt...

Recently, Crain’s Chicago Business reported on Chicago winning an award from Fast Company magazine. “Chicago stood out in our reporting for its creativity and vitality,” Editor and Managing Director Bob Safian said at a press conference here. “Chicago offers something distinctive.”

Fast Company Magazine is representative of much of the media: not much on hard facts about Chicago. The Windy City has distinctions but not positive ones. Chicago’s retail sales tax is the highest in the nation at 10.25 percent. Unions, high taxes, and political corruption have made Chicago one of the leaders in big city decline.

One of the great modern myths of big city America is that Chicago is some sort of successful town and a role model for others. By any traditional performance standards Chicago has failed. Like many old, big industrial cities, Chicago peaked in the 1950 Census with a population of 3,620,962. In the 1950s over two percent of the entire U.S. population lived within Chicago city limits. Over a half century later, while America’s population doubled, Chicago’s population declined. The 1960, 1970, 1980, and 1990 Census numbers showed Chicago losing population.

Mayor Daley and Chicago residents were quite excited about the 2000 Census showing Chicago gaining over 112,000 people (a growth rate at half the national average for the 1990s). It appears the 1990s were an anomaly for Chicago. Since the year 2000, according to Census estimates, Chicago again continued its population decline with a loss of 63,000 from 2000 to 2006 leaving a total of 2,833,321.

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Though 2000 was a somewhat positive year, that year’s Census numbers mask some rather disturbing trends. The white flight out of Chicago continued with 150,000 non- Hispanic white people leaving Chicago from 1990 to 2,000. African-Americans, for the first time, began leaving Chicago with a net loss of 5,000. The population gain in Chicago during the 1990s was due to Hispanics.

Here's another problem highlighted...

What is even more pronounced is the lack of white children in the public school system. The entire Chicago Public School is only 9 percent white . Not a single public school has a population that is majority white. Not one.

Recently, the stubborn facts of Chicago’s population decline made news. As CBS TV Chicago reported in January of 2008:

Half-empty schools are ‘unacceptable’ because they don't serve their students or the communities they're supposed to anchor, Mayor Richard M. Daley said Thursday, setting the stage for the biggest wave of school closings in decades.

Officials contend 147 of 417 neighborhood elementary schools are from half to more than two-thirds empty because enrollment has declined by 41,000 students in the last seven years. A tentative CPS plan calls for up to 50 under-used schools to close, consolidate with other schools or phase out over the next five years.

Most of the underused schools are on the South and West Sides, often where the student population is largely African-American, and in lakefront neighborhoods that include Lincoln Park, Lake View, Uptown and North Center.”

The situation isn’t any better in Chicago’s Catholic School System. The Chicago Tribune reported on February 27, 2007:

Nicholas Wolsonovich, superintendent of schools for the archdiocese, called the exodus from Chicago's Catholic schools ‘mind-boggling.’ In 1964, he said, some 500 schools were spread across the diocese, with about 366,000 students. Now, the system has 257 schools and fewer than 100,000 students. Over the last decade statewide, the number of Catholic schools has dropped from 592 in 1997 to 510 this year, according to figures released at the conference.

Chicago’s political elite love to give speeches about the importance of public education, but not for their children. Mayor Daley sent his children to private schools. Deborah Lynch, the former head of the Chicago Teacher’s Union, sent her kids to private schools. America’s newest political superstar, Barack Obama, sends his kids to private schools. With the exodus of the rich from Chicago’s public schools, 69 percent of the children in the Chicago Public School system are poor.

The horrible public schools, high taxes, and crime have driven families out of Chicago. The city’s job base cannot compete with anti-union places like Houston and Phoenix.

Let's talk a little about business in Chicago. Chicago and Cook County already has the highest sales tax in the nation but what might be the after effects of that and other taxes on businesses here...

Chicago’s high tax life style has driven businesses and jobs to the suburbs. Chicago is one ofthe only towns in America with an employee head tax on employment. Companies with over 50 employees must pay $4 a month per employee to the city. Most of the major corporate headquarters in the Chicago area are located in Chicago’s suburbs. Motorola, Walgreens, All State, Kraft, Anixter, Illinois Tool Works, McDonald’s, Alberta-Culver, and Abbott Labs all have their corporate headquarters outside city limits.

Recently, Chicago got its first Wal-Mart. In most places in America, politicians allow consumers to decide whether a business should fail or succeed. In Chicago, with the power of the unions, Chicago’s city council has made it difficult for Wal-Mart to open up any more stores. Chicago’s poor are relegated to paying higher retail prices and have less access to entry-level jobs. The adjacent suburb of Niles has the unusual distinction of being the only town in America (with less than 45,000 people) with two Wal-Marts. One of the Niles Wal-Marts is located right across the street from Chicago.

The largest employer in the city of Chicago is the Federal government. Followed by the City of Chicago public School system. Other major employers are the city of Chicago, the Chicago Transit Authority, the Cook County government, and the Chicago Park District. These thousands of government workers provide the backbone of the coalition for higher taxes, generous pensions and “political stability”.

Chicago’s political system is inefficient and costly. There are no term limits in Chicago. The Democratic Party has controlled the Mayor’s office since 1931(a big city record). There’s no opposition: Democrat’s control 49 out of 50 seats on the city council. Corruption is everywhere. Barely a month can go by without a major scandal. The FBI has the largest public corruption squad in the United States located in Chicago . Chicago voters don’t seem to care. Those who care about high taxes, good public schools, and low crime are a small minority in Chicago.

I just post this here because there are some things to consider here. Does anyone think the City of Chicago is in trouble? Does anyone think there might need to be some changes made in how the city is able to attract and retain businesses here?

This column concludes that low-tax and low-regulation Houston, Texas will over take Chicago in 15 years. Does anyone think that will happen?